mental health parity

What is mental health parity?

The 2008 Mental Health Parity and Addiction Equity Act (MHPAEA) requires that if a health plan covers mental health and substance use disorder treatment, it must do so with benefits that are no less favorable than the benefits the plan provides for medical and surgical care.¹ The MHPAEA expanded upon mental health parity legislation that had been enacted in 1996 by adding coverage parity requirements for substance use disorder treatment.² The requirement to cover mental health treatment in parity with medical and surgical care is called “mental health parity.”

The Affordable Care Act (ACA), enacted in 2010, expanded the parity rules to individual and small-group health plans, starting with plan years that began on or after July 1, 2014.³ (Previously, the parity rules only applied to large-group health plans.)²

The ACA also mandated that non-grandfathered individual and small-group health plans cover mental health and substance use disorder treatment as an essential health benefit, starting with plan years beginning on or after Jan. 1, 2014.⁴ Large-group and self-insured health plans are not required to cover the ACA’s essential health benefits⁵ – which means these plans do not have to offer coverage for mental health or substance use treatment.

To be clear, mental health parity rules do not require a health plan to cover mental health or substance use treatment.⁵ The ACA does require that coverage, however, for individual and small-group plans.

Parity rules only apply if the plan offers mental health and/or substance use disorder benefits. If so, those benefits cannot be any less favorable than the benefits the plan provides for medical/surgical treatment.

As noted above, the ACA requires non-grandfathered individual and small-group plans to cover mental health and substance use disorder treatment and parity rules to apply to those benefits. But large-group and self-insured plans are not required to offer those benefits. If they do, however, the parity rules apply.

Do mental health parity rules apply to all health plans?

Mental health and substance use disorder parity rules apply to most major medical health plans, including individual and small-group plans, fully insured large-group plans, and self-insured plans offered by large employers. But small employers (those with 50 or fewer employees) that self-insure their employees’ coverage are not subject to mental health and substance use disorder parity requirements.⁵

Mental health parity rules do apply to plans that are grandfathered under the ACA.⁶ But these plans are not required to cover the ACA’s essential health benefits⁷ so they may or may not offer coverage for mental health and substance use disorder treatments. If they do, they must follow mental health parity laws.

Mental health parity requirements do not apply to retiree-only plans, short-term health plans, or plans that are considered excepted benefits, such as fixed-indemnity policies or critical illness policies. State and local governmental plans can opt out of mental health parity requirements, and many do.⁸

The MHPAEA does not apply to Medicare or Medicaid, although these programs have similar protections for enrollees.⁸

What sort of benefit designs are prohibited by mental health parity rules?

If a plan offers mental health and substance use disorder (MHSUD) coverage, those benefits cannot be any less favorable than the benefits the plan provides for medical and surgical treatment.² But what does “less favorable” mean?

Here are some examples of plan designs that are not allowed:⁹

• Providing out-of-network coverage for medical/surgical care but not for MHSUD care.
• Covering inpatient care for medical/surgical care but not for MHSUD care.
• Higher copays to see an MHSUD provider versus a medical/surgical provider.
• More restrictive visit limits for MHSUD treatment than the limits (if any) that apply to medical/surgical care.
• Requiring preauthorization more frequently for MHSUD care than for medical/surgical care.
• Requiring written treatment plans for MHSUD care but not for medical/surgical care.

How can I file a mental health parity complaint?

If you believe that your health plan isn’t compliant with mental health parity rules, you can file a complaint. Depending on the type of coverage you have, you’ll file the complaint with your state insurance commissioner, the U.S. Department of Labor, or the U.S. Department of Health & Human Services.